Complete Guide to Heat Pump Hot Water Rebates in Australia (2026)

STCs are the foundation rebate available to all Australians. They are part of the federal Renewable Energy Target and apply to heat pump hot water systems because they are classified as "solar water heaters" under the scheme (they harvest ambient energy from the air).

How they work: When you install an eligible heat pump hot water system, your installation creates a number of STCs based on the system's efficiency, your location (deeming period), and the size of the system. These certificates have monetary value and can be sold on the open market.

In practice: Your installer handles the STCs. They will either assign the STCs to themselves (giving you an upfront discount on the install price) or sell them on your behalf. Almost all installers use the first approach: they deduct the estimated STC value from your quote, so you pay less upfront.

Current value: Each STC is worth approximately $37-$40 in early 2026. A typical heat pump hot water installation generates 20-25 STCs in metropolitan areas, resulting in a discount of $500-$700. Installations in regional and northern areas may generate slightly more due to higher deeming periods.

Eligibility requirements:

• The system must be on the Clean Energy Regulator's list of approved products.
• The installation must be done by a licensed plumber/electrician.
• It must be a new installation (not second-hand equipment).
• One claim per premises for hot water.

STC value fluctuates based on market supply and demand. The price has been relatively stable at $37-$40 through 2025-2026, but it can change. Your installer's quote should clearly state the STC discount applied.

Victoria has the most generous combined rebate package for heat pump hot water in Australia.

Solar Victoria Hot Water Rebate: Up to $1,000

• Amount: Up to $1,000 for eligible heat pump hot water systems.
• Eligibility: Victorian homeowner-occupiers with combined household income under $210,000 and property value under $3 million.
• Process: Apply through the Solar Victoria portal before installation. You will receive an eligibility confirmation. Then choose a Solar Victoria-approved installer and schedule installation. The rebate is deducted from your invoice.
• Waiting time: Currently 2-4 weeks for approval. This may increase as the May 2027 gas ban deadline approaches.
• One rebate per household (if you have not previously received a Solar Victoria solar panel rebate, you can still get this).

VEU (Victorian Energy Upgrades) Certificates: $700 - $1,000

• How it works: Your installer creates Victorian Energy Efficiency Certificates (VEECs) based on the energy savings your new heat pump will deliver compared to your old system.
• Value: Typically $700-$1,000 depending on what system you are replacing and the certificate spot price.
• Applied at point of sale: The installer deducts the value from your invoice. You do not need to apply separately.
• Key requirement: Your installer must be a VEU-accredited provider. Not all plumbers are. Ask specifically about VEU accreditation when getting quotes.

Total Victorian rebate stack: Federal STCs ($500-$700) + Solar Victoria ($1,000) + VEU ($700-$1,000) = $2,200 to $2,700 total.

NSW operates the Energy Savings Scheme (ESS), which provides certificate-based incentives for energy-efficient upgrades including heat pump hot water.

NSW ESS Certificates: $400 - $700

• How it works: Similar to Victoria's VEU. Your installer creates Energy Savings Certificates (ESCs) based on the estimated energy savings of your new heat pump over its lifetime.
• Value: Typically $400-$700 depending on system efficiency, what you are replacing, and certificate market price.
• Applied at point of sale: The installer deducts the value from your invoice.
• Installer requirement: Must be an Accredited Certificate Provider (ACP) under the ESS. Check with your installer.

Total NSW rebate stack: Federal STCs ($500-$700) + ESS ($400-$700) = $900 to $1,400 total.

NSW does not currently have a direct cash rebate equivalent to Victoria's Solar Victoria program. However, some local councils and community energy programs offer additional incentives. Check with your local council for any available programs.

The ACT takes a different approach with interest-free loans rather than direct rebates.

Sustainable Household Scheme: Interest-free loans up to $15,000

• How it works: The ACT Government provides interest-free loans to help homeowners and renters purchase eligible energy-efficient products, including heat pump hot water systems.
• Loan amount: Up to $15,000 per household (covers the full cost of most heat pump installations with plenty of room for other upgrades).
• Repayment: Repaid through your rates or energy bills over up to 10 years.
• Eligibility: All ACT residential property owners and some renters (with landlord consent).
• Process: Apply through the Sustainable Household Scheme website. Choose from a list of approved suppliers.

Total ACT benefit: Federal STCs ($500-$700) at point of sale + interest-free loan for the remainder. The effective cost of capital is zero, making the total cost of ownership very attractive.

The ACT also has among the greenest electricity grids in Australia (100% renewable electricity commitment), meaning a heat pump in the ACT has near-zero operational emissions.

South Australia's Retailer Energy Productivity Scheme (REPS) provides certificate-based incentives.

REPS Activities: $300 - $600

• How it works: Energy retailers are required to deliver energy productivity activities to their customers. Installing a heat pump hot water system qualifies as an eligible activity.
• Value: Typically $300-$600 depending on the specific activity and the retailer.
• How to access: Contact your energy retailer or ask your heat pump installer if they can facilitate REPS incentives.

Total SA rebate stack: Federal STCs ($500-$700) + REPS ($300-$600) = $800 to $1,300 total.

SA homeowners also benefit from high solar irradiance, making the combination of rooftop solar and a heat pump particularly effective. Running your heat pump on solar self-consumption can reduce hot water costs to near-zero.

Queensland: QLD does not have a state-specific heat pump rebate scheme as of early 2026. Federal STCs ($500-$700) remain available. Some QLD energy retailers offer voluntary incentives for switching to efficient electric hot water. Check with your retailer. The QLD Government has flagged potential future incentive programs as part of its energy transition strategy.

Western Australia: WA similarly relies on federal STCs as the primary incentive. The WA Government's Climate Action Strategy includes residential electrification targets but has not yet implemented a dedicated heat pump rebate. Some WA electricity retailers offer off-peak tariff incentives for heat pump systems. Federal STCs: $500-$700.

Tasmania: Tasmania's cooler climate makes heat pump efficiency a key consideration, but cold-climate CO2 models perform well. Federal STCs are available. Tasmania's relatively low electricity prices (among the lowest in Australia due to hydro generation) make heat pump running costs particularly competitive. Federal STCs: $500-$700.

For all three states, the federal STC scheme provides meaningful savings, and the running cost advantages of heat pumps over gas are strong regardless of state-specific rebates.

Homeowners regularly leave money on the table when claiming heat pump rebates. Here are the most common mistakes:

1. Not checking VEU/ESS accreditation: Your installer must be accredited under the relevant certificate scheme (VEU in VIC, ESS in NSW) to apply certificate discounts. A non-accredited installer means you miss out on $400-$1,000 in savings. Always ask about accreditation before accepting a quote.
2. Applying for Solar Victoria after installation: The Solar Victoria rebate must be approved before installation begins. If you install first and apply later, you will be rejected.
3. Not assigning STCs: If you forget to assign your STCs to the installer at the time of installation, you can still sell them yourself through the STC market, but this is more complex and you may receive less value. Make sure your contract explicitly mentions STC assignment and the discount amount.
4. Choosing a non-eligible system: Not all heat pump hot water systems qualify for STCs. The system must be on the Clean Energy Regulator's approved product list. Stick to major brands (Rheem, Sanden, Reclaim, iStore, Stiebel Eltron) and you will be fine.
5. Missing income/property thresholds: The Solar Victoria rebate has income ($210k) and property value ($3M) caps. If you are close to these thresholds, check your eligibility carefully before counting on the $1,000 rebate in your budget.
6. Not getting multiple quotes: Installers apply rebates differently. Some absorb the STC/VEU value into their margin rather than passing the full discount through. Getting 2-3 quotes lets you see who is passing through the maximum rebate value.